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Yesterday’s call between US Secretary of State Mike Pompeo and Director of the Office of Foreign Affairs of the Communist Party of China Yang Jiechi clearly went even worse than thought. Since the conversation President Trump has twice tweeted about the “Chinese virus”, in what looks to be a direct response to the orchestrated disinformation campaign, led by wolf-warrior diplomat Zhao Lijian, about the origin of the virus:

How much have people on both sides, and the financial markets, thought through what lies over the edge of the fast approaching precipice of the US-China relationship? Whatever temporary floor may have been put in place with the phase one trade deal in January has collapsed, and if the COVID-19 epidemic leads to mass casualties and sustained economic damage in the US then prepare for things to get really ugly.

Over the last 24 hours we have gotten even closer to the precipice. I can not think of a more dangerous time in the US-China relationship in the last 40 years, and the carnage from the coronavirus has barely begun in the US.

The CCP is stirring anger against America inside China while embarking on a global campaign to sow disinformation about the origin of the virus and the CCP’s initial mishandling of the outbreak as part of the “we did everything we could, we tried to save the world, we bought you time” propaganda push, while now also offering help to fight the epidemics in other countries.

As things get worse here, and no doubt in other countries as well, I am very afraid that the anger towards China and people of Chinese descent will only increase, and possibly explode. Perhaps the CCP will cynically see that as a benefit, if it drives more of the diaspora to want to return to the Motherland?

Sudden economic downturns, mass illness and death, nationalist citizenry and political leaders under tremendous pressure who find political benefit in deflecting blame onto an external enemy have led to how many disasters throughout history? How do we realistically arrest this?

I do not mean to be so alarmist but if the last few weeks has taught us anything it is how quickly things can change tectonically. Please tell me I am overreacting because of the stress we are all now under.

The rest of today’s newsletter is shorter than normal. Thanks for reading.

China is strongly indignant at and firmly opposes U.S. stigmatization by calling the novel coronavirus "Chinese virus", and urges the United States to correct its mistakes and stop making groundless accusations against China, according to a Chinese Foreign Ministry spokesperson Tuesday.

Spokesperson Geng Shuang made the remarks at a press conference when asked to comment on U.S. President Donald Trump's tweet Monday, in which he called the novel coronavirus "Chinese virus".

"Recently, some U.S. politicians have connected the novel coronavirus with China, aiming to stigmatize China," Geng said. "We are strongly indignant at and firmly oppose that."

US President Donald Trump used the phrase "Chinese Virus" in a tweet expressing his support for various US sectors following the Wall Street bloodbath on Monday. Highlighting the new coronavirus' foreign origin - which is still uncertain - raised a red flag indicating Trump and his team will likely play the China card to divert domestic attention from a botched handling of the virus to attacking China...

What's worse, the improper nomenclature from Trump and his ilk may be just the start of escalated China-US tensions in a wide range of fields like trade, economic exchanges and politics. In this sense, China needs to be prepared for the re-escalation of China-US trade conflict in the coming period. Based on the experience of the trade war, China must not hesitate to strike back once the US attempts to exert pressure and deflect domestic criticism toward China.

In terms of pandemic prevention and control, China is at least one month ahead of Italy, which in turn is one or two weeks ahead of countries like France, the UK and the US.

Some observers noted that Trump's tweet could be a reaction to a tweet sent by Chinese Foreign Ministry spokesperson Zhao Lijian on his personal Twitter account that asked the US to be transparent about its epidemic situation...

Some Chinese analysts worry that Zhao's tweets may cause the US to retaliate, and they blame Zhao for "infuriating" the US. They also thought Zhao was repeating "the wrong conspiracy theory" similar to what US politicians use to smear China.

Jin Canrong, associate dean of Renmin University of China's School of International Studies in Beijing, disagrees with this opinion. He told the Global Times on Tuesday that it is totally reasonable for Zhao to question the US and to urge it to be transparent.

Because the flu season in America started in September, and in October, the US military delegation came to Wuhan for the Military World Games, so it is totally possible that US military personnel unintentionally brought the virus to China, since at that time, no one in China knew the existence of COVID-19 if it really originated in the US, Jin said.

2. American reporters expelled

First, in response to the US designation of five Chinese media agencies as "foreign missions", China demands, in the spirit of reciprocity, that the China-based branches of Voice of America, the New York Times, the Wall Street Journal, the Washington Post and Time declare in written form information about their staff, finance, operation and real estate in China.

Second, in response to the US slashing the staff size of Chinese media outlets in the US, which is expulsion in all but name, China demands that journalists of US citizenship working with the New York Times, the Wall Street Journal and the Washington Post whose press credentials are due to expire before the end of 2020 notify the Department of Information of the Ministry of Foreign Affairs within four calendar days starting from today and hand back their press cards within ten calendar days. They will not be allowed to continue working as journalists in the People's Republic of China, including its Hong Kong and Macao Special Administrative Regions.

Third, in response to the discriminatory restrictions the US has imposed on Chinese journalists with regard to visa, administrative review and reporting, China will take reciprocal measures against American journalists.

The above-mentioned measures are entirely necessary and reciprocal countermeasures that China is compelled to take in response to the unreasonable oppression the Chinese media organizations experience in the US. They are legitimate and justified self-defense in every sense. What the US has done is exclusively targeting Chinese media organizations, and hence driven by a Cold War mentality and ideological bias.

Most of the American reporters for the three news organizations named in the Tuesday announcement have press cards and visas or residence permits that expire this year. The press cards are needed to maintain the visas, and turning them in effectively means the journalists would need to leave the country shortly afterward. Reporters who were recently given a press card and residence permit that do no expire until 2021 can presumably continue to work...

the fact that Beijing is preventing the expelled reporters from reporting from Hong Kong and Macau, two semiautonomous areas, is a sign of the further erosion of press freedoms in those territories, and it could portend clampdowns on foreign newsrooms in Hong Kong.

“We unequivocally condemn any action by China to expel U.S. reporters,” said Martin Baron, executive editor of The Post. “The Chinese government’s decision is particularly regrettable because it comes in the midst of an unprecedented global crisis, when clear and reliable information about the international response to covid-19 is essential. Severely limiting the flow of that information, which China now seeks to do, only aggravates the situation.”

The New York Times is also among the Western media which cover China stories with double standard and biased practices.

Its contradictory comments on the lockdown policies of China and Italy sparked criticism among Chinese public, in which it praised Italy's action as it's "risking its economy in an effort to contain Europe's worst coronavirus outbreak." However, the post showed a different stance from its other tweet 20 minutes ago that claimed the lockdown in China "came at great cost for its people's livelihoods and personal liberties."

The New York Times' coverage of the outbreak aiming to attack China's political system and smear China's effort to treat novel coronavirus pneumonia (COVID-19) patients is unprofessional, biased and even inhuman, Chinese experts said, urging biased Western media to stop ignoring Chinese efforts in medical care and protection of the people's lives.

3. The outbreak and imported cases

The nine imported cases included six from Spain, one from the United States and two from the United Kingdom. That brings the total of imported cases in the city to 40 by Monday.

Beijing also reported seven newly-added suspected cases Monday, three from the United Kingdom, one from the United States, one from France, one from the Netherlands and one from Egypt. A total of 14 people in close contact with the suspected cases were screened.

"People who have lived or traveled in key countries in the 14 days prior to their arrival in Shanghai at the Hongqiao and Pudong international airports will be taken to districts' temporary checking and observation sites upon arrival by district staff," Zeng Qun, deputy director of the Shanghai Civil Affairs Bureau, said during a press conference.

After arriving at temporary observation sites in each district, they will then undergo nucleic acid tests for the coronavirus, which is a new procedure, said Zeng. Those with negative test results will be escorted to their residences or designated sites by district officials to undergo 14-day quarantine, while people testing positive will be transferred to designated medical treatment institutions, the bureau said...

People arriving from key countries who are quarantined at designated sites need to cover accommodation and meal fees themselves, the bureau said.

The same expanded measures apply to those who arrive in Shanghai via other ports in China from key countries, the bureau said.

Hong Kong will put all visitors under a two-week quarantine and medical surveillance starting midnight on March 19 to prevent further spread of the new coronavirus, chief executive Carrie Lam said at a press briefing.

The government also told Hong Kong residents to avoid all non-essential travel and issued its second-highest red outbound travel alert to all countries and territories except for mainland China, Macao and Taiwan...

Separately, the gambling destination of Macao will block entry by anyone except people from mainland China, Hong Kong or Taiwan.

In the video clip, the woman in fitness clothes and clearly in short breath after a jog, bickered loudly with a Beijing community worker, who chided her for leaving her home and jogging outdoors while wearing no masks.

The woman, who was found out to be a Chinese-Australian who recently came back to Beijing, did not apologize for her illicit behavior, but instead, yelled "Help! I'm being harassed!" while trying to open the door of her house and get in.

After the woman slipped in to her home, the community worker called the police. In the end of the clip, two policemen showed up, warned aloud that she has to be quarantined for 14 days, adding nobody is above the law, no matter he/she is a Chinese national or not.

On Monday, Beijing police said they had filed an investigation of a woman surnamed Li for hiding her health status when entering China, a potentially criminal offense. A Biogen spokesperson has confirmed to FiercePharma that it believes “Ms. Li is a U.S.-based Biogen employee who made a personal decision to travel to China.”

Just one year ago, in March 2019, Gao Fu, director of China’s Centre for Disease Control and Prevention (CDC) told reporters that, while a virus could emerge at any time, it would not in future cause an epidemic on the scale of Sars in 2002-03...

“We spent 730 million yuan to build a reporting and early warning system for the CDC after Sars,” Yang Gonghuan, former CDC deputy director, said...

“For the whole of December when the disease happened, I have learned that the system was not put into use. I was very surprised [that happened] at the time,” she said.

“This [failure] actually exemplifies a lot of the problems that are happening in China today.”

A leaked document from Wuhan Central Hospital – one of the designated facilities for Covid-19 patients – this week indirectly confirmed that the early warning system was not activated during the early period of the outbreak.

Since Beijing declared the highest level of medical emergency in Hubei on January 25, the CMC has sent more than 10,000 personnel into the area. The PLA was also armed with more power than local governments to control medical supplies, a sign of the central government’s determination to contain the spread of the virus.

4. The economy

Goldman Sachs said on Tuesday that China’s economy will likely shrink 9% in the first quarter, underscoring how the coronavirus has disrupted normal business activities, while China reported an uptick in new cases of the disease, most of them imported.

Chinese Vice Premier Sun Chunlan on Monday called for unremitting efforts to curb the novel coronavirus disease (COVID-19) and targeted policies to boost work resumption.

Leading a central government group to guide the epidemic control work in Hubei, the center of the coronavirus outbreak, Sun, also a member of the Political Bureau of the Communist Party of China Central Committee, made the remarks while inspecting production resumption and spring plowing in Wuhan, capital of Hubei.

The crux of the argument is that many of the sectors hardest hit by the coronavirus outbreak, such as airlines and real-estate development, are also among the most likely to have high dollar-denominated debt burdens. The chart below shows the situation for six of China’s airlines...

In the light of China’s ongoing reliance on the dollar, it would intuitively make sense to grant them a dollar liquidity swap line; yet geostrategic pressure not to act in favour of China has precluded this and will continue to do so

Companies in Wuhan that are part of such sectors as medical equipment, medicine, protective gear and disinfectant production-and those related to public utilities including power, water and gas supply, communications, environment and medical waste disposal-are allowed to resume production, according to a notice released by the provincial authorities.

Enterprises that help provide daily necessities for the public and products or services for agricultural production are also allowed to restart operations, the notice said.

The companies that have an impact on national or global industrial chains may resume operations subject to the approval of related authorities and under the condition that they will put epidemic control measures in place and remain committed to shouldering their responsibilities for epidemic prevention, according to the notice.

China will press ahead reform of streamlining the approval process for businesses and foster new growth drivers to keep employment stable, according to a State Council executive meeting on Tuesday.

The meeting, presided over by Premier Li Keqiang, also underlined efforts to fast-track the work resumption of large investment projects to strengthen weak areas and benefit the people.

It was noted at the meeting that keeping employment stable should be a priority amid the country's efforts to promote balanced advancement in the prevention and control of the coronavirus epidemic and economic and social development.

A fifth of Chinese households can survive only 2.3 months without any income, while 40 per cent cannot last past three months, according to a survey of 120,000 people conducted last week by the China Household Finance Survey and Research Centre, a respected independent consultancy in Chengdu.

“We cannot say if the impact of the outbreak on employment will be half a year, a year, or more, but what is for certain is that it will be longer than it is possible for some segments of society to sustain their livelihoods,” said Gan Li, director of the centre and a professor of economics at Texas A&M University.

The measures follow a guidance issued by 26 central government departments last week about increasing consumer spending, especially on tourism and culture. Meanwhile, Beijing has called on officials to lead local consumption. As a result, government heads in various jurisdictions, including Nanjing city, Shandong, Hunan, Guangdong and Hainan, have in recent weeks appeared in public and dined at restaurants and gone shopping. The Qinhuai district of Nanjing city, for example, required that district heads spend at least 100 yuan locally.

For Chinese officials, to say anything less would be to tarnish the infallible “wartime” leadership of President Xi Jinping. The rest of us, however, are free to point out the obvious. China’s biggest export of late has been the coronavirus, and the economic effects of that are only beginning to be felt. The 17 per cent fall in exports to date may prove to be a ceiling rather than a floor.

During January and February, the coronavirus produced a supply-side shock within China. But there was no real change in overseas demand for Chinese goods during this period.

Only now, as China’s coronavirus case numbers plateau and those in Europe and the US accelerate exponentially, is the supply-side shock becoming a demand-side one that could well dwarf the one that hit China’s biggest export markets in 2008 and 2009.

5. China’s offers of help

China will do its best to provide support and assistance to help Spain combat the COVID-19 epidemic, Chinese President Xi Jinping said in a phone conversation with Spanish Prime Minister Pedro Sanchez on Tuesday evening.

President Aleksandar Vucic told a press conference on Sunday evening that he has sent a letter to his Chinese counterpart Xi Jinping asking for help after the EU imposed limits on exports of medical equipment amid the coronavirus crisis.

“I sent a letter to President Xi, in which for the first time I officially called him not only a dear friend but also a brother, and not only my personal friend but also a friend and brother of this country,” Vucic said.

“As of today, as you know, we cannot even import goods, according to the European Union’s decisions, [European Commission president] Ursula von der Leyen said this a while ago, we cannot import medical equipment from EU countries,” he added.

The 12-member medical team from East China's Zhejiang Province will depart Shanghai for Milan, which is fighting one of the worst outbreaks in Italy right now. The team is being sent by the National Health Commission of China...

Apart from experts on infectious disease, the team consists of two TCM doctors.

Hu Xu, a TCM doctor from Tongde Hospital in the medical team, told the Global Times that the hospital prepared TCM granules for use by 10,000 people, some for prevention and some for treatment of mild cases. They will also bring cow-bezoar bolus for resurrection of severe patients.

According to the announcement, which was made known by Jack Ma at his personal Weibo account Monday, each of the 54 African nations will receive 20,000 testing kits, 100,000 masks and 1,000 medical use protective suits and face shields.

The donated materials will be first delivered to Addis Ababa, capital of Ethiopia. Prime Minister Abiy Ahmed Ali of Ethiopia will take the lead in managing the logistics and onward distribution of the supplies to the African countries.

Medical experts in Shanghai have held video calls with representatives of overseas Chinese associations in Italy, France, Malaysia, Australia and the United Arab Emirates, answering questions about fighting the coronavirus.

Zhang Wenhong, who heads a Shanghai medical team to fight the epidemic, said Monday the epidemic is expected to a last long time and suggested people become mentally prepared for a "protracted war."

As the world is facing challenges brought about by COVID-19, Pakistani President Arif Alvi chose this special time to visit China to show solidarity between the two "iron brothers." On the occasion, Global Times reporter Wang Bozun (GT) sat down with Pakistani Foreign Minister Shah Mahmood Qureshi (Qureshi), and spoke about the pandemic situation and the cooperation between the two all-weather strategic partners in dealing with the challenges caused by the virus...

Yes, China has helped and shared its experience with us. China has sent teams to assess the situation and provided testing kits in the thousands. We are expecting personnel protective equipment from China. We think we need some additional portable ventilators. Quarantine facilities are being upgraded in Pakistan with Chinese help. So, there is coordination and assistance being provided by China.

6. Global propaganda struggle

I wrote a few weeks ago that Beijing’ bungling of its initial response to the outbreak showed that the Chinese Communist Party remains ill-suited to global leadership. But as the crisis has progressed, it has begun to seem that the U.S. may suffer even greater damage to its international position and prestige...

There is still a window — albeit a fast-closing one — for Washington to take action.

The needed steps include leading the G-7 in fashioning a multilateral economic stimulus package; promoting international cooperation in finding a vaccine and managing the cross-border ramifications of the disease; providing more coherent and effective guidance for domestic local and state authorities seeking to mitigate the damage; helping tell the stories of democracies that combated the disease while remaining true to their values; and taking this as an opportunity to rebuild the public-diplomacy capabilities needed to wage the battle of global perceptions with China.

After the outbreak of COVID-19, China promptly informed the international community about the epidemic, shared the genome sequence of the virus, introduced its epidemic prevention and control experience, and actively provided assistance to countries hard hit by the epidemic. China's efforts have bought valuable time for other countries and made important contributions to the fight against the epidemic worldwide. China's battle against the epidemic is an important part of the global war of epidemic prevention and control. We express our support and appreciation for China's efforts. - The Presidium of the Belt and Road Journalists Network

Last week, a senior Indian opposition leader shared a link on Twitter and called the novel coronavirus a “bioweapon that went [rogue]” and “an act of terror”.

The post by Manish Tewari came weeks after he had tweeted an excerpt from a fictional thriller, insinuating that the virus had been developed in a Chinese lab, with state support.

Tewari’s tweet is among scores of messages on India’s social media networks – from messaging groups to YouTube channels and Facebook feeds – that have been perpetuating disinformation and conspiracy theories about China and Chinese people, since the virus broke out last year.

Almost 70% of the APIs for medicines made in India come from China. If China’s pharmaceutical plants do not return to full capacity soon, severe global medicine shortages will become likely.

The COVID-19 pandemic has highlighted the costs of Xi’s increasing authoritarianism. It should be a wake-up call for political and business leaders who have accepted China’s lengthening shadow over global supply chains for far too long. Only by loosening China’s grip on global supply networks – beginning with the pharmaceutical sector – can the world be kept safe from the country’s political pathologies.

More than 20 days have passed since the epidemic began to spiral out of control in Italy and experts still generally believe the peak of the pandemic in Europe has yet to arrive. What is worse, some experts predicted that tens of thousands of people will die from the virus. A most worrying thing is that people cannot see the turning point and are hoping warmer weather will bring a turnaround.

China's fight against COVID-19 realized the most fundamental pursuit of the people － bringing the epidemic under control. At the same time, the government has been responding to people's resentments on various issues with a positive attitude. China's efforts are not as bad as some people have imagined. There were indeed a lot of problems to be addressed and solved. But we must be realistic in our self-estimation but not improperly belittle ourselves due to these problems. This is the proper attitude we should take.

Within the context of the coronavirus outbreak, the payoffs from BRI have been extremely limited: while Ethiopian authorities continue to permit flights to China, as many as 91 of the 115 countries listed by Chinese authorities as Belt and Road “international cooperation partners” have imposed border restrictions on Chinese nationals. Within the context of this crisis, this suggests that the soft power and influence accrued by BRI is not as extensive as others have posited. In that sense, the coronavirus outbreak is much more than what the Global Times has called an “occasional bump in the road” for the Belt and Road Initiative (Global Times, February 19). Nonetheless, messaging from Beijing following the abatement of new cases in the PRC suggests that it will seek to use its response to outbreaks overseas to enhance its international reputation.

7. Mask shortage in America

One of the nation’s top cancer hospitals has informed its staff it has a shortage of masks and other personal protective equipment, even as at least five employees and three patients have been diagnosed with COVID-19.

The hospital, Memorial Sloan Kettering Cancer Center in New York, has only a week’s supply of masks on hand, according to a transcript of a staff meeting last Friday afternoon. The shortage, Kreg Koford, senior vice president of supply chain and sustaining care, told employees, is due to production and distribution delays in China, where most personal protective equipment, or PPE, is manufactured.

Comment: Can Joe Tsai and/or Brooklyn Nets owner Jack Ma donate any masks to Memorial Sloan Kettering? And guess how angry people will get when they see frontline medical workers in the US getting sick and possibly dying because there are no masks? As I wrote in yesterday’s newsletter:

Of course China bought/used every mask it could. Any country in same situation would. Shame on companies and countries that allowed the outsourcing of this capacity, it does not seem fair to blame China for this aspect of the global disaster.

But that will not stop even more anger at China and Chinese as the mask shortage becomes so obviously dangerous to the average American.

At today’s Coronavirus Task Force press conference, Vice President Pence asked construction companies to donate to their local hospitals their stocks of N95 respirator masks and stop ordering more for the time being. This call comes in the middle of a major shortage of these kinds of masks, which get their name from being able to block at least 95% of 0.3 micron particles.

8. Interview with Guo Yuhua

Guo Yuhua is Professor of Anthropology at Tsinghua University in Beijing. She has spent the majority of her career researching and writing about the lives of rural Chinese people. Her work The Narration of the Peasant: How Can ‘Suffering’ Become History? is based on oral histories collected during her research in Ji village in northern Shaanxi province. She has written: “one of the ways to defeat the hegemony of official texts and official discourse is to write the history of ordinary people, the history of the ‘sufferers’.”

Professor Guo is currently undertaking research on food safety and peasant workers suffering from pneumoconiosis, a lung disease which affects workers in coal mines, quarries and foundries. Guo’s books are banned in China. As part of the China Conversations series, Guo Yuhua spoke from Beijing with writer Jonathan Chatwin.

Foreign and Defense Affairs

Secretary Michael R. Pompeo Remarks to the Press - United States Department of State the Department of State is today also sanctioning nine entities based in South Africa, in Hong Kong, and in China, as well as three Iranian individuals, all for knowingly engaging in significant transactions for the purchase, acquisition, sale, transport, or marketing of petrochemical products from Iran, the world’s largest leading state sponsor of terro

The Twists and Turns of the Polar Silk Road – Over the Circle - by Marc Lanteigne Over the past five years, China has been seeking to place its own diplomatic and economic stamp on the Arctic, via what has, since 2018, been frequently referred to as the ‘Ice’ or ‘Polar Silk Road’ (Bingshang Sichouzhilu 冰上丝绸之路), or PSR. The foundation of this ‘road’ was to be the development of enhanced maritime trade through an (increasingly ice-free) Arctic Ocean, as well as associated infrastructure and other offshoot projects. Two years later, it can be argued that while some components of the PSR are successfully operational, others remain firmly relegated to the drafting board.

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Re: CCP will cynically see that as a benefit if it drives more of the diaspora to want to return to the Motherland.

Not if the US government is handing out free money like Trump is planning to do right now. Growing up in China, I know personally the Chinese people's obsession with money, whether it is 小恩小惠 or a sizable check like $1,000. Actually I am glad that Trump is thinking about this type of fiscal stimulus given the breadth of impact that extends to common folks, which seems to be an "in your face" (in a good way) to China's crazy propaganda of "leading an excellent example" and "大家都来抄作业".

If 厉害国 is so successful in leading this fight, then why isn't it handing out checks, just like the US government is going to do, to common folks who live paycheck to paycheck (i.e. the majority of Chinese people) and who have lost at least 2 months' wages because of its initial cover-up and mishandling? Once people begin to ask these questions, it may actually help pull them out of ignorance and denial, and rethink what the CCP has really done in this crisis that itself started.

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What i can't get my head around is, proper preparation and failing that, proper virus fight, would have cost far less than the two trillions already announced around the developed world....testing kits dont cost that much! surely!!! What kind of people are running the free world atm?